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François Rochon

lines on the record: 83
first: 2022-11-13
most recent: 2022-11-13
sittings or episodes: 1
sources: podcast

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“Oh, yes. I believe to use a bridge analogy, a thing that persistence and patient trumps intelligence and strength. I mean, persistence, I think, is the key ingredient to all the great human achievement. And patience also, it's basically the same thing, but persistence plus patience equal a great reward. You have to accept that you'll have some bumps in the road and you'll have some setbacks. But if you keep working hard, because you enjoy it, because you have great goals, eventually if you have the right approach, the right values, and you keep at it, think eventually things will turn out well.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“No, I don't think I'm naive, but just realistic. That's just the nature of our human society. And there are some very bad things. I couldn't agree more. I mean, everything you read about tragedies and terrible things that happen all over the world. But there's also great, great things, great accomplishment, great things that our civilization have built over the years. You have to look at that also. Both are important. And in the end, I think the overall balance is that the more good have come out of the human history than bad.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Increase. Increasing earnings is at 7% annually, double the whole earning in the US every 10 years. So it makes sense that every 10 years the S&P 500 or the Dow Jones Industrial Average doubles in value because earnings have doubled over the last 10 years. And there'll be a recession, of course, and earnings will go down in recession, but they'll rebound and eventually they'll make new records. I think that's very reassuring to understand that because there'll be tough times. But if you're patient, you'll be rewarded.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, it's the lesson that if you study human history, that's the lesson. And Amber and Lincoln said 150 years ago. So this two shall pass away. And Ben Graham said that this phrase is summarized the whole human history. Things passed. Crisis passed. And in the end, the human race continues to always improve things and moves forward. And I would say same thing with companies. Like we talked at the beginning of the interview, companies grow their earnings six, seven percent yearly and give a 2% dividend. On average, so that's an 8 or 9% return for stock. So of course when they go down 30, 40, 50 percent, there's every reason to believe that within five or six or seven years, they'll make new records just because earnings continue.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“We live even better than we're living today. And I'm pretty confident that we'll find solutions to all our big problems like climate changes and inflation”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“I've been accepting that for 30 years, and I've seen the recessions, I've seen terrorist attacks, I've seen a lot of crisis in many countries. But in the end, I think the human race always advances forward. And the right approach is to be optimistic, that we'll find solutions to all of our problems. Just we have to put our minds to it, but I'm confident that the survival gene, this is probably the most strongest gene we have. We want to survive. We want to move forward. It's a very, very great fuel for human investment. And pretty optimistic he's going to continue. So I would say that in the next, I don't know if it's going to be around 50 years, but I'm pretty sure if I'm around our standard of living will have increased by 300%.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Energy or affixing climate changes will come from ideas and the human mind. And if you think about it, all the great progresses of the last century came from idea. Nothing really has changed our environment, nature and human nature. But we find ways to always improve things because we have this drive as human beings of never being satisfied. We always want to improve our situation. And I think this drive is very powerful and gives me the feeling that things will always improve. There'll be tough periods. Crisis and catastrophes. I accept that.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Always very slowly and not in a linear fashion, of course. There are some tough periods and some better periods, but over a long period of time, the improvement has been quite steady and quite impressive. I mean, the standard of living has probably doubled every 25 years in the last century, which is incredible. People worry about climate change and their right to be worried. And they worry that we won't have any world oil and we'll have to find alternate energy. And I think they're right too. Not necessarily that we won't have any oil left, but I think we do have to find better sources of energy. But what will bring those changes, those improvements, either for”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, you're right. I think nothing was ever built on pessimism. I think you never make wise decision with fears. I think optimism is an important ingredient to success. Not the only ingredient, but one important ingredient. I would say if you study human history and you go back many, many years in the past, I think the only conclusion is that you cannot be not amazed of how much we've improved over the last centuries. I mean, just in terms of technology, it's incredible the changes that we've made. And you have to understand what is the fountain head of those improvements. And it's the human mind. It's just inventing things, creating things, finding ways of doing things better.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Met Want So, I think that's the key thing. I think the more fields you understand, probably your understanding of human nature will increase. But again, I think the key factor there is it's not work. You have to do it because you enjoy it and you're curious and you want to learn about it because you won't really learn if you're not really passionate about it.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“A group of human beings would have act and some do well, some less well. But in the end, it's really about understanding human beings. And like we talked about, I mean, the reason. So, if you want to understand human, I think you have to study all the fields that they are involved in. And I think, was it the Charlie Munger that said that a man with a hammer looks at every problem as a nail? Well, I think the more kind of the more different numbers of hammers you have, the more different type of nails you'll be able to dress. So I think that's the same thing. Yeah, I think”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Well, I do believe it's a benefit, but I don't think benefits are the main goal to me at least. The main goal is I'm just passionate and interested. I'm curious. I like to learn about history and philosophy and cultures and arts and science and how things work. It's just, I'm just interested and curious and passionate. But I do believe that the more fields you understand, the better you can understand as a whole the human race, human nature. And I think when you understand human nature, you have more tools to understand investing because corporations, they're not made of robots. They're made of human beings. And they act even though it's a corporation. It's all system act as”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“I don't know about that, but I know for sure there's more to wealth that's also having a happy life when you enjoy getting up in the morning and loving what you do. And if it is writing, that's the right choice, of course. To go back to the missing gene, I think when you talk about great investors or great artists, great writers, great scientists, really what you're saying is you're talking about people that have creativity. They build something that wasn't there before. They go uncharted territories, uncharted paths. And to be able to do that, you have to be able to go into a path that has not been drawn before. And I think you need the capacity to not follow the tribe to be able to go into uncharted territories. But that's the ingredient for creativity.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“The absentee gene because it's missing, the missing gene. So I believe that great investors, great artists, great philosophers, great scientists don't have a tribal gene. For some reason, probably just nature of odds being born that way. And because they have this missing gene, they're able to go left when everyone goes right. And I think if you have your genetic heritage intact, so you have a travel gene, I think it's very hard to be the index because you won't be able to go right when everyone is going left and not succumb to a market pressure when the stock market is down. I think one part of the success of a great money manager is that they have this mising gene. They don't have the tribal gene. That's my theory from observation. Same thing with great artists and great thinkers and great builders.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“I love My idea is that as human beings, we have this gene that has been passed on over thousands and thousands of years that I call it the tribal gene, that when the tribe is running one way, we have the urge of following the tribe just because it's for our own security. And that was the right thing to do 30,000 years ago when there was a big tiger coming in the village. has been passed on and it's part of the DNA of most humans. But for some reasons, my own personal theory that there's no scientific basis at all except observations is that probably something like 5% of human beings don't have that gene. They are able to go left when most of the tribe goes right. And I think I call it”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Always should act on reason and rationality. And I think that's the right behavior that Warren Buffett has explained over and over. I've been going to the annual meeting for, I don't know, 23 years. Every year he explained the importance of having the right attitude toward market fluctuations. But it's hard because people are emotional and sometimes even though they understand the concept of buy and hold you should not sell in the downturn. Some people it's just very hard to resist the fears that they have they could lose money. And I think in your book you talked about my theory of the tribal G.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“It always intrigues me why someone would sell his portfolio because it's down 25% and he fears that they will go down another 10%. So he sells and hopes to buy later. I don't understand that. I mean, I don't think it makes sense. The only explanation is that I think they let their fears and emotions get the better of the rationality that probably they do possess. Probably one part of the investment success is not only knowing about the principles, but having the right behavior. Everyone has emotions. But I think you have to be rational when you decide to take actions. Emotions is one thing and actions is another thing. So you shouldn't act on emotions.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, when I started, I was very enthusiastic. I remember when I read Warren Buffett's letters, I really felt like I understood something that many people don't understand. And it always eludes me why many people don't understand.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“You have to enjoy it. I have a passion for it. I think you want to understand also the fundamental nature of any field that you study. And all the fields, either being philosophy or psychology of the arts or the sciences, they're complex fields. There's many layers. But if you enjoy them and you enjoy reading about them, slowly you'll learn. It's like kind of a process. It's a very slowly goes into your blood. And I think that's how you get passionate and dispassion is transformed into something concrete. You can do something constructive with that interest, like building our collection or a portfolio of securities.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, because what is exceptional by definition is rare. So if you want to find them, you have to lift a lot of rods. You have to look for it. And if it's not something you enjoy with passion, you won't have the persuasion necessary to look everywhere. But when you enjoy it, it's like watching baseball games. If you enjoy baseball and you're watching two or three baseball games a day, it's not work. You enjoy it. And after a while, you probably know all the great players and you can identify which one you would put on your team if you're a team manager.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“He was humble. He was curious, and he read everything he could find on anything. And that's why it was so great. I think he had today out of succession as managed it, but I think at some point he had probably 2,500 works of art. Most of them important works of art. So it was, I think, and now many of them are in museums, but I think he had something like Treaty Robert Reimer that he purchased in the early years or Donald Jodd was not known at all. So I would say was a great art picker, probably the greatest of all time.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, limited resources. So he was very, very selective that could only purchase artists that were not yet very well known. And he looked at everything. I mean, he knew almost all great artists or all important artists at the avant-garde in the 1950s, 60s, 70s, 80s. And exactly as I described, he had the approach of looking at many, many, many artists, like if you're opening a lot of oysters and identify the great ones, finding those rare pearls. And I think he was great at it because he was so passionate, because he knew all the history of art. I mean, in his house, he had all the books on the history of arts starting probably with the Italian Renaissance. So he was knowledgeable.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Schwab and he compared Charles Schwab company to Geico and basically saying that like Geico Schwab had a structural advantage to all those big competitors. So he understood very, very profoundly the companies invested in and admired him a lot and he had lots of lessons to teach and like you say very sadly he passed away at the beginning of the year. As for the camppanza Yes, I met him in 2009, that was probably six months before he passed away. And that was probably one of the most important meanings of my life because I met, like I said, I think the greatest contemporary art collector of all time. He didn't have the resources of some billionaires today that can purchase almost anything they like. And it's good for them.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Oh, yes. Well, Peter Lynch was the first money manager I read about and has been a model since then. Of course, he was very diversified, I think, when he managed Magellan Fund. I think he owned 500, 600 names. So it was a little different than the Mariproche, but he did very, very well. He really had an incredible passion for finding great companies, young companies that were on the verge of having great years of growth. And as for Lou, Hualu is one was one of those great investors that owned very few securities, probably ten or twelve or something like that. And I remember it was because of him when invested.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“But I mean, I don't think any museum's director would argue that they're important artists, one in the light art and the other in the video art. And I don't think any museum director would argue that in 50 years they'll be considered important. Perhaps they're too contemporary to be known for the general public as Pablo Picasso or Jackson Pollock, but I think in 20, 30, 40 years, they'll be considered probably close to be as important as those great artists.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, I believe I have a similar approach to art. I don't think I'm a venture capitalist in art, some yes. Some young artists out purchased work because I think they're very interesting and I believe they've got a great future. But most of the artworks I purchased are from artists that I believe, I may be wrong, but I believe that they already are important. They already are great museums and have a singular and unique voice. And I'm pretty sure that in 50, 60 years when we want to look at what are the most important artists of our time, we'll select those artists. I mean, for instance, I think James Dorrell or Bill Viola, two great American artists, they're not that well known for the general public.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And also, there's many of those 340 or 50 that you mentioned that we just want to follow it down very closely. And perhaps we're not 100% sure that there are kind of securities. We want to be sure that we understand the companies very well. And it's easier when you follow them very closely. But out of those 300 or so, there's probably 80 to 90 or perhaps 100 companies that really, it depends just on the price. If the price was low enough or the valuation was reasonable enough, we would invest. Yes.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Having good returns increase and you have the luxury of waiting for the perfect ball. But of course, if you never swing anything, you won't have much return. So that's the equivalent of being cash. So that's the trick. Sometimes you have to swing perhaps not perfect balls that are probably in the 280 or 290 zone. And sometimes you have to accept the perhaps you have a little lower average because you couldn't get a perfect ball. I think if you're very patient, you'll have your chances and your investment career to have great opportunities and great opportunities by definition are simple. I mean, all the great investments think I've done were very simple businesses. You know, the valuation was reasonable and I knew the manager was great. And sometimes when I get into more complicated things that it didn't turn out as well. Expected.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Disadvantage of that approach is when the ball is in the area of 240, you have to be disciplined enough not to swing, even though if it's in the strike zone. So when that happened, you have a strike hold up against you. In the stock market, you don't have that. You can have a perfect ball in the middle of the plate. You have the luxury of not swinging if you don't want to. You don't have any call strikes in the investment world. And Warren Buffett said, that's the most beautiful thing about investing. So by trying to simplify things, what we're trying to do really is to focus on those 400 zone in the strike zone where odds are very high that we'll have hit if we swim and think that's just that. The more simple you get down to it when you follow or analyze a company, I think the odds”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes, I think it goes back to when I started to invest. Probably it was Warren Buffett that took the baseball analogy and used the example of Ted Williams in his book called Science of Eating. He had this very systematic way of analyzing his spading average depending on where the ball was in the strike zone. So I think it subdivided the strike zone in 77 baseballs and calculated this batting average for every one of the seven zones. And discovered that in some zones he was batting 400. But in some other zone Z was batting 240. I said, well, if I want to maintain a good batting average, I think it did because I think his lifetime batting average is 344. Well, he had to be very disciplined and very selective.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“They make acquisitions that turn out not as expected. So you have to accept that also, that contrary to a work of art that states Companies are a living organizing, so it changed constantly. So you have to accept that what can be beautiful in one year, five years can be quite different. So that's just the nature of investing. But I think that makes it also very interesting.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“I remember the first year, I remember reading the annual report of Microsoft. I don't know which year, probably 1994. You know, they had nothing on the balance sheet, excess cash, a lot of cash, but that was it. I mean, how easy it is to understand that you can see that everything that has to be expense is expense. Nothing is capitalized. And even after that, they make 25% net margin. This is the experience I have when I read that. I think it's great. It's beautiful. It's simple. It's easy to understand. And that's what I want to focus. I want the companies that are easy to understand that have clearly something special and something simple. The problem is things change or sometimes companies can be very strong and very beautiful for many years, but the dynamic of the industry changes or...”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's not easy. Like I said a few minutes earlier, Beauty is I know it when I see it. But I think the beauty usually is simple. Like you say, it's pure, but it's very simple. You look at it and very quickly you realize that you're in front of something special. And I think all those great companies have seen over the years. Usually when I read their, when I look at the balance sheet of the number, it's a very simple business. I mean, there's not too much things capitalized when you look at the cash flow statement. It's beautiful. I mean, you look at the net free cash flow a year. It's always throwing more cash under spending and the excess is either allocated to acquisition or dividend or start buybacks. But basically it's a simple accounting. It's a simple business. They've got a simple balance.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“The work of many artists. And I think another ingredient needed is you have to love the process. I mean, it's not work going to museums and looking at great artworks because I enjoy it. I really love it. And it's the same thing with companies. I want to study companies. I'm not thinking I'm working. I'm enjoying myself. And nothing excites me as finding a new company at Indo about and realizing a little bit like constellation software some nine years ago that wow that's a fantastic company. I'm really happy that I found that and I want to learn everything about it. So it is a very similar process. But I think the key thing, the two key things you have to enjoy the process and you have to look at a lot of things if you want to be able to identify the rare masterpieces, both in the art world and the Corporate world”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Great periods. So you have to be able to identify that probably the company that you're thinking of investing is really its best period of growth compared to the best period of creation for an artist. So I think to be able to identify that, you really have to understand in depth the artists and the companies you're studying. It's also the fact that you have to look at a lot of companies and a lot of artists to be able to identify those rare artists, those rare great companies. And I think Peter Lynch used that analogy that it's like looking for pearls. You have to open a lot of oysters. The more oysters you open, the more pearls you're likely to find. So I think that's the same thing. You have to look at many, many companies or the world there.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“It's a similar process. I would say probably the biggest difference is when I buy a work of art, I never want to sell it as when I purchase a stock. Ideally, I would want to keep it for many, many, many years, but I realized that most of them, at some point you have to sell it. So I would say that's probably the biggest difference. But besides that, I think the process is very similar. I really try to find the best of the best. In French, we say la creme de la Creme. I want to find who are the greatest artists. Not only that, what is the greatest creation period and what were the best work of art? You want to find the greatest companies, but you have to realize that same with artists. Companies have great periods and not so”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“But when I see it, I know it. And I would say that if you look at a lot of art in your life, you'll be able to identify masterpieces. Think it's the same thing with companies and CEOs. If you see a lot of them, if you read a lot of annual reports and you study a lot of companies and a lot of businessmen and businesswomen over the years, after a while, you'll be able to identify the really great ones.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And these are not easy to explain because they're kind of subjective. They're based on judgment. But, you know, as you get more experience, I think that's something that comes with experience, better judgment. Well, I like to think so. And that judgment helps us select great people. Because, you know, we've heard a lot, we've seen a lot, and we can see great managers because they're so rare. And I would probably go back to the art analogy here. When you go to museums and go to and visit the best museums in the world, pretty quickly you can see which are the greatest artists.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Who would you entitle your capital with? And that's one question I ask myself. Do the seal of the company we invest, I'll be happy for him to manage our capital if I'm spending 10 years long island. And I think Mark Leonard, I would sleep very well at night, deserted Island knowing that he's there and managing constellation software. Same thing with Tom Gainer at Markel or Stanley Ma at MTY Food, of course, Warren Buffett at Berkshire.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“That's a good question. You know, people want some scientific approach to assessing managers what makes a great manager manager. But I remember a friend of mine said, well, this is the kind of person you'd like him to marry your daughter. And I think that sums all the great managers, either Tom Gaynor or Mark Leonard or Stanley Mott MTY Food They're great human beings. You want them to manage your capital. I mean, if I had to go away, you know, I always use that analogy of the Gilligan Island test. If you're stranded on a desert island for 10 years, remember that show at Gilligan Island?”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Have you met him? Yes, a few times. And I think he's a great guy, he's a great human being, a great businessman, as great as you can find.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“And probably a month later, I think the day after I read the annual report about a few chairs just to follow it, but a month later we made a sizable investment in the company and never sold the share. So that was almost nine years ago.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Yes. I remember as yesterday, I think there was a Christmas party in 2013. I was at some friend and a young friend of mine, very young. He asked me if I know this company Constellation Software. And I was a little ashamed because I thought I knew all the great companies. So I said, no, I don't. So I think it was almost on Christmas Eve. I read the 2000, well, probably 2012 annual report of constellation software written by Mark Leonard. And I remember when I read that, that was love at first sight. I said, this is my kind of God. I knew it because 20 years of reading at a reports, that was on the best I've read. And I, of course, did a little more research, read about the company, read the annual letters, tried to understand everything about the company.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Carmax is a very unique business. I think they've got something like 4% market share of all the used cars sold in the US every year. And I don't think probably the closer now is Carvana, but Carvana is not profitable yet. So I believe that Carmax has a very unique business model and very well managed, in my opinion, also. And capital allocation is very important in the companies we look for. You talk about Berkshire Atherway, but we could talk also of Amatech or Constellation software or MTY Food. I think those three companies have a very strong history of intelligent capital allocation. And, you know, if you're going to own a company for 10 years, a lot of your returns will be the fruits of intelligent capital allocation over the years. And that's one very important. Criteria we look for.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think all the companies who mention a combination of having great managers, but not only great businesses, but kind of unique businesses. And, you know, the idea of having a boat is that I believe these companies have something special that gives them strong competitive advantage. But if I had to summarize in one sentence, I believe they have a unique business model. And I mean, if your visa is very similar to MasterCard, of course, but I think the two together, they're as great businesses as you can find. I think Google Alphabet is fantastic business. I mean, it's really dominating our world today. I don't know exactly the number, but probably 40% of all ads on the Internet or something like that indirectly.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Go down, and you have to accept that. But if you have a long-term horizon, I think that's a great opportunity. The stock is down 50% in the last year. I don't think the intrinsic value has gone down 50%.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“One stock is down 20% today as we are speaking is Carmax. I think it's down to 67. And I believe, I don't know exactly when, but within five or six years, a company can earn $12 a share. So at 67, if I'm right on that $12 a share, let's say in 2027 or 2028, this is a stock that could triple in value at least. So I think it's a great opportunity. It's already, well, it's a lower today in terms of size, but it's already in our top five holding in the portfolio. But this is an example of a company we could increase. Of course, the results the last quarter were a little disappointing, but I know that I've been owning Carmax for 15 years. I know that, yes, it is a great company, but it is a cyclical company when there's a slowdown in the economy sales.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Well, one stock that we already own for more than two years is five below, which I think is a great, great company. And the stock went down probably 35, 40 percent at some point, and we increased it. I think we reduced, well, I remember we reduced Dorama, which is a fine company, a great company in Canada. But I think the two were trading at similar P ratios, but I believe that five below will grow much faster in the years to come than the Lorama. So probably the Laura Rama is a little more stable in terms of their revenues and profits. So market gives it higher multiplication because these days the market likes stability. But I think over five years, Five Below will do better. So we just sold one that looked less attractive and increased the one that is more attractive. Perhaps if I could take another example.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“I wouldn't say dramatically, but probably we purchased, we made three or four trades, either selling or reducing one holding or buying or increasing one other holdings. We've done three or four, and we're thinking of doing more because in the last few days, many of the securities and portfolio has gone down quite a lot and some are getting very, very attractive level. And like I always say, it makes sense to sell a company that, I don't know, trade at 60% of intrinsic value to buy one that trades at 40% of intrinsic value. And in our markets, you'll have things like that.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT
“Hope for, or that valuation has not come down as much as the others and increase the ones that I believe are the most undervalued portfolio. If I'm right doing this, technically when the market do rebound, the portfolio will have improved prospects going forward. So that's what I'm trying to do.”
2022-11-13 · We Study Billionaires · RWH016: The Best Of The Best w/ François Rochon · IDENTIFIED FROM THE TRANSCRIPT